The stocks featured in this article are seeing some big returns. Over the past month, they’ve outpaced the market due to new product launches, positive news, or even a dedicated social media following.
However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. Keeping that in mind, here are two stocks we think live up to the hype and one best left ignored.
One Momentum Stock to Sell:
Papa John's (PZZA)
One-Month Return: +32.1%
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Why Do We Steer Clear of PZZA?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its six-year trend
- Lacking pricing power results in an inferior gross margin of 17.3% that must be offset by turning more tables
At $40.79 per share, Papa John's trades at 20.1x forward P/E. If you’re considering PZZA for your portfolio, see our FREE research report to learn more.
Two Momentum Stocks to Watch:
CAVA (CAVA)
One-Month Return: +10.7%
Starting from a single Washington, D.C. location, CAVA (NYSE: CAVA) operates a fast-casual restaurant chain offering customizable Mediterranean-inspired dishes.
Why Does CAVA Catch Our Eye?
- Fast expansion of new restaurants to reach markets with few or no locations is justified by its same-store sales growth
- Same-store sales growth averaged 13.8% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- Free cash flow margin jumped by 7.9 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
CAVA’s stock price of $89 implies a valuation ratio of 146.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
ESCO (ESE)
One-Month Return: +23.3%
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Are We Fans of ESE?
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 18.2%
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 20.7% annually
ESCO is trading at $180.78 per share, or 29.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
